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Patrick Sheehy

Patrick Sheehy
In

International Issues Update

ON OUR DESKS

  • Updating advice on Russia-related business risks 
  • Drafting comments on FDA draft rule on “healthy”
  • Counseling on antidumping and countervailing duty petitions

These are just examples of client service. How can we help you? Email any IBC counsellor for assistance or consult our issues list to find the expert you’re looking for.

WIBC DISCUSSIONS

February 2023 schedule of events:

  • February 9: Principal Deputy Assistant Secretary of State for Near Eastern Affairs Yael Lempert, Economic and political priorities in the Middle East
  • February 15: Assistant U.S. Trade Representative for Labor Josh Kagan, Labor priorities in trade negotiations and forced labor
  • February 16: Deputy Assistant Secretary of State for East Asian and Pacific Affairs Rick Waters, U.S.-China relations and State’s “China House”

WIBC discussions are open to WIBC members only. Not a member? Contact Alix for membership inquiries.

YOU NEED TO KNOW

Americas

Secretary of State Blinken and U.S. Trade Representative Tai joined 11 newly-announced partners for a virtual ministerial of the Americas Partnership for Economic Prosperity (APEP), first announced by President Biden at the Summit of the Americas in June 2022. The United States already has free trade agreements with nine of the 11 APEP partners, who are Barbados, Canada, Chile, Colombia, Costa Rica, the Dominican Republic, Ecuador, Mexico, Panama, Peru, and Uruguay. No dates have been announced for any formal negotiations.

During a January 26 USMCA deputy trade ministers meeting in San Diego, the United States raised concerns over Mexico’s policies impacting energy, medical device supply chains, and agricultural biotechnology, as well as over Canada’s proposed digital service tax. Following the meeting, Senators Wyden (D-OR) and Crapo (R-ID) called on USTR to step up USMCA enforcement on Mexico.

Against the backdrop of the January 24 Community of Latin American and Caribbean States (CELAC) summit in Argentina, several regional players made news on trade. Brazil and Argentina raised eyebrows with an announcement of common currency cooperation, later clarifying they are considering a “common means of payment” that would not replace their own domestic currencies. Brazilian President Lula pledged cooperation on modernizing Mercosur, finalizing the Mercosur-EU FTA, and potential China-Mercosur FTA negotiations.

Neither the United States nor China is a member of CELAC, but Special Presidential Advisor Chris Dodd attended the CELAC summit and met on the margins with Argentina’s president and economic minister to discuss lithium, electric vehicles, agribusiness, and renewable energy. Chinese President Xi praised CELAC as the premier institution for Chinese engagement in the region. St. Vincent and the Grenadines will host the next CELAC summit in 2024.

Contact: Ethan Knecht, Steve Ziehm

Inflation Reduction Act

With intense scrutiny continuing over electric vehicle (EV) tax credits contained in the Inflation Reduction Act (IRA), Senator Joe Manchin (D-WV) introduced a bill (the American Vehicle Security Act) seeking to delay implementation of the tax credits and remove authority provided to Treasury to interpret and implement the IRA’s requirement for origin of qualifying critical minerals and battery components. A white paper issued by Treasury had sought to address allies’ objections to the IRA provisions by broadening the definition of “free trade agreement.”

Senate Finance Committee Chair Ron Wyden (D-OR) has said he has no interest in reopening the IRA, but the new Manchin bill could increase pressure on Treasury’s final implementing rules. Treasury Secretary Janet Yellen on January 24 told the Wall Street Journal that Japan and the European Union would need to negotiate new trade agreements with the United States to meet the IRA’s mineral-sourcing requirements.

Three unions representing autoworkers, steelworkers and machinists teamed up with environmental group Sierra Club and consumer advocacy group Public Citizen to urge the Biden administration not to change the IRA’s EV tax credit rules.

Contact: Chris Benscher

China Tech Controls

The United States reportedly expects to soon reach an agreement with Japan and the Netherlands on restricting the sale of advanced semiconductor manufacturing equipment to Chinese parties. The United States adopted controls last October and has sought Japanese and Dutch cooperation,  as the two countries are home to major semiconductor manufacturers ASML and Nikon. Japan and the Netherlands may not formally announce the move but are expected to implement controls over the coming weeks, following domestic processes.

Further developments are expected in the coming months but likely not before Secretary of State Blinken’s planned February 5-6 visit to Beijing. Commerce may announce technical changes to semiconductor restrictions following the January 31 close of a public comment period. The semiconductor restrictions are expected to be the first in a series of expected controls on advanced technologies like quantum computing, artificial intelligence, biotech, and advanced clean energy.

Congress continues to press for a hard line approach. House Foreign Affairs Committee Chair Michael McCaul (R-TX) has repeatedly requested access to Commerce data on licensed exports to China. On January 24, Speaker Kevin McCarthy announced 12 Republican members of the new House Select Committee on the Strategic Competition between the U.S. and the Chinese Communist Party.

Contact: Pat Sheehy

Quick takes

  • Ecuador’s free trade negotiations with Mexico, and consequently Ecuador’s accession into the Pacific Alliance, deadlocked this week over disagreements on agriculture.
  • Congresswoman Debbie Dingell (D-MI) announced on January 25 a new Heartland Caucus expected to include about 40 members of Congress focused on manufacturing, labor, rural health care, infrastructure, and environment issues from the perspective of “not flyover country.”
  • The Senate Agriculture Committee announced four upcoming Farm Bill hearings, with USDA Undersecretary for Trade and Foreign Agriculture Affairs Alexis Taylor scheduled to appear February 1 for the first hearing.
  • The State Department’s Directorate of Defense Trade Controls (DDTC) hinted during a January 24 webinar at possible adjustments to the International Traffic in Arms Regulations (ITAR) to allow general authorizations for certain exports from the U.S. Reportedly, issues with customs software have been the main factor complicating implementation.

NOTICES, BILLS & HEARINGS

Federal Register Notices

Newly Introduced Legislation

House

  • H.R.566 (Nehls, R-TX) Prohibits Federal spending in China.
  • H.R.558 (Issa, R-CA) Would prohibit certain foreign countries from purchasing or leasing property near sensitive sites.
  • H.R.554 (Hill, R-AR) Would deter Chinese aggression towards Taiwan by publishing reports on financial institutions with ties to Chinese officials and their families.
  • H.R.552/H.R.551 (Gooden, R-TX) Would prohibit U.S. contributions to UN organizations/Would direct the Attorney General to report on how U.S. research has benefited China.
  • H.R.545 (Buchanan, R-FL) Would support seasonal industries affected by antidumping and countervailing duty investigations.
  • H.R.540 (Kim, R-CA) Would require the Treasury Secretary to provide more equitable treatment of Taiwan in international financial institutions. 
  • H.R.535 (Connolly, D-VA) Would prohibit the U.S. from recognizing any potential referenda in Russian-occupied, sovereign Ukrainian territory.
  • H.R.513 (Jackson, R-TX) Would prevent foreign influence over agriculture production and supply chains.
  • H.R.510 (Davidson, R-OH) Would limit Chinese influence at the IMF.
  • H.R.506 (Cohen, D-TN) Would designate Russian-based mercenary Wagner Group as a foreign terrorist organization.
  • H.R.503 (Buck, R-CO) Would impose sanctions against TikTok. 
  • H.R.499 (Fallon, R-TX) Would require the SEC to require annual disclosures of investments with ties to China.
  • H.R.457 (Cohen, D-TN) Would establish a list of countries based on the level of corruption and sanction individuals involved.
  • H.R.401 (Allen, R-GA) Would prohibit the National Science Foundation from awarding grants to Chinese military companies and their affiliates.

Senate

  • S.125 (Cotton, R-AR) Would withdraw China from receiving normal trade relations treatment.
  • S.104 (Rubio, R-FL) Would support seasonal industries affected by antidumping and countervailing duty investigations.
  • S.85 (Hawley, R-MO) Would impose sanctions against TikTok.
  • S.68 (Tuberville, R-AL) Would prevent foreign influence over agriculture production and supply chains.
  • S.9 (Cruz, R-TX) Would prevent strategic petroleum reserve exports to China.

Upcoming Congressional hearings 

House

Senate

WHO’S WHO

Arrivals

  • Mr. Axel van Trotsenburg, World Bank Senior Managing Director for Development Policy and Partnerships
  • Mr. Brad Grantz, Senate Commerce Committee Republican Staff Director
  • Ms. Courtney O’Hara Taylor, Senate Environment and Public Works Committee Democratic Staff Director
  • Mr. Dan Sullivan, Senate Commerce Committee Republican Chief Counsel
  • Mr. Jeff Zients, White House Chief of Staff
  • Ms. Sarah Ladislaw, NSC Senior Director for Climate and Energy

Want more scoops on personnel moves? Find the most recent Who’s Who here.

UPCOMING EVENTS

  • EU Agriculture Council (Brussels), January 30
  • Federal Open Market Committee (Washington), January 31-Feb.1
  • EU-Ukraine Summit (Kyiv), February 3
  • Secretary of State Blinken travels to China, February 5-6
  • Brazilian President Lula da Silva travels to Washington, February 9-10

Looking farther ahead? Find the most recent full international events calendar here.

Patrick Sheehy
In

International Issues Update

ON OUR DESKS

  • Advising on U.S. clean vehicle tax credits
  • Assisting with embassy outreach regarding defense procurement
  • Exploring client engagement options related to IPEF and other regional economic initiatives
  • Preparing client applications for U.S. government advisory committees

These are just examples of client service. How can we help you? Email any IBC counsellor for assistance or consult our issues list to find the expert you’re looking for.

WIBC DISCUSSIONS

January 2023 schedule of events:

  • POSTPONED: House Ways and Means Chief Trade Council Joshua Snead, originally scheduled for January 19
  • January 24: EU Delegation Head of Trade Michael Margherita, U.S.-EU trade opportunities and challenges, including priorities for the Trade and Technology Council
  • January 26: Acting AUSTR Sarah Ellerman, IPEF pillar I trade priorities

WIBC discussions are open to WIBC members only. Not a member? Contact Ethan for membership inquiries.

YOU NEED TO KNOW

China

Chinese Vice Foreign Minister Xie Feng, an experienced and relatively non-combative diplomat, will reportedly be appointed ambassador to the United States. In a further sign of possible rhetorical moderation, the Ministry of Foreign Affairs also moved fiery spokesman Zhao Lijian to a minor role in its department of oceanic affairs.

In addition to these potentially important personnel moves, Beijing on January 12 also effectively ended its two-year ban on coal imports from Australia. The ban had been imposed as retaliation for Australia suggesting an investigation into COVID’s origins in China. While recent actions may signal a softening of China’s aggressive “wolf warrior” rhetoric of recent years, observers don’t expect substantive shifts.

Meanwhile, the U.S. House of Representatives established on January 10 a Select Committee on China. House Speaker Kevin McCarthy said the Committee will address issues such as manufacturing, intellectual property, and supply chains. The House passed on January 12 a bill that would prohibit releases of oil from the U.S. Strategic Petroleum Reserve being exported to China. More than 100 House Democrats voted for the bill, which now heads to the Senate.

Contact: Pat Sheehy, Ethan Knecht

Indo-Pacific 

President Biden hosted Japanese Prime Minister Fumio Kishida at the White House on January 13 to discuss regional security issues, the war in Ukraine, and climate change.  The leaders affirmed close U.S.-Japan cooperation and expressed support for Japan’s 2023 chairmanship of the G7.  U.S. and Japanese defense and foreign affairs ministers conducted 2+2 dialogues in Washington in advance of the meeting and agreed to enhance U.S. troop deployments to Japan.

Secretary of State Blinken, Secretary of Transportation Buttegieg, Secretary of Commerce Raimundo, and U.S. Trade Representative Tai delivered recorded remarks to the fifth Indo-Pacific Business Forum (IPBF) cohosted by Japan and the United States on January 12 online and in Tokyo. The U.S. delegation in Tokyo was led by Under Secretary of State for Economic Growth, Energy, and the Environment Jose Fernandez.

In conjunction with the forum, the U.S. Trade and Development Agency issued calls for proposals for infrastructure activities advancing digital infrastructure, promoting clean energy and strengthening supply chains, as well as to advance the infrastructure priorities of Pacific Island countries.

Close on the heels of these high-level engagements with Japan, Dutch Prime Minister Mark Rutte is scheduled to visit Washington January 17.  Japan and the Netherlands are key potential partners for the United States in collaboration on Chinese semiconductor export controls. No immediate breakthroughs are expected, but the two sets of visits may signal future developments.

Contact: Pat Sheehy

North America 

Mexican President Lopez Obrador hosted President Biden and Canadian Prime Minister Trudeau in Mexico City for the January 10 North American Leaders Summit. The leaders agreed to hold a trilateral semiconductor forum with industry in early 2023; coordinate semiconductor and critical mineral supply chain mapping efforts; and convene workforce development efforts in a range of advanced manufacturing industries.

On energy and climate, the leaders committed to reduce methane emissions from wastewater, develop a Food Loss and Waste Reduction Action Plan, coordinate electric vehicle charging standards, and develop a North American clean hydrogen market.

In a test of the United States-Mexico-Canada Agreement’s (USMCA) dispute settlement mechanism, Mexico and Canada won their challenge over U.S. rules regarding regional content required for automobiles to qualify for duty-free treatment. Canada and Mexico hailed the finding, which the United States called “disappointing.” The United States must now agree with Canada and Mexico on how to apply the panel decision, or face possible retaliatory tariffs.

Contact: Ethan Knecht, Chris Benscher

Quick takes

  • Brazil will reportedly appoint its first woman ambassador to the United States, Maria Luiza Viotti. Observers continue to evaluate the causes and consequences of January 8 riots carried out by supporters of former President Jair Bolsonaro in Brasilia.
  • The United Arab Emirates named the head of its oil company to oversee preparation for the UN Climate Summit (COP28) to be held in Abu Dhabi in December.
  • House Foreign Affairs Committee Chairman Michael McCaul (R-TX) renewed oversight demands related to the U.S. withdrawal from Afghanistan, calling out the Biden administration for “noncompliance” with previous requests.

NOTICES, BILLS & HEARINGS

Federal Register Notices

Newly-introduced legislation

House

  • H.R.344/H.R.343 (Roy, R-TX) Prevents China’s communist party from purchasing U.S. real estate/Prohits U.S. contributions to the World Health Organization.
  • H.R.340 (Mast, R-FL) Requires the President to impose sanctions against foreign supporters of terrorist organizations, including Hamas and the Palestinian Islamic Jihad.
  • H.R.332 (Gallagher, R-WI) Requires the President to impose sanctions against Mexican government officials on grounds of corruption and human rights violations.
  • H.R.317 (Bice, R-OK) Would prohibit the SEC from requiring climate disclosures.
  • H.R.314 (Salazar, R-FL) Prohibits the removal of Cuba from the list of state sponsors of terrorism until Cuba satisfies certain conditions.
  • H.R.295/H.R.294 (Keating, D-MA) Prohibits the use of federal funds to support participation of Russia in the G7/Prohibit the U.S. Government from recognizing Russia’s claim to any part of Ukraine.
  • H.R.229 (Wittman, R-VA) Imposes sanctions on Chinese officials involved in the COVID-19 pandemic.
  • H.R.80/H.R.79 (Biggs, R-AZ) Removes Pakistan’s designation as a major non-NATO ally/Directs the President to withdraw the U.S. from the World Health Organization.
  • H.R.57 (Bergman, R-MI) Prohibits mobile phones and software that engage in data theft on behalf of a communist country or foreign adversary.
  • H.R.22 (McMorris Rodgers, R-WA) Prohibits the sale of any petroleum products from the Strategic Petroleum Reserve to any entity that is under the ownership, control or influence of the Chinese Communist Party.
  • H.Res.11 (McCarthy, R-CA) Establishes Select Committee on China.

WHO’S WHO

Arrivals

  • Mr. Doug McKalip, USTR Chief Agricultural Negotiator
  • Congressman Jason Smith (R-MO), Chair of the House Ways and Means Committee
  • Ms. Neonu Jewell, DFC Chief Diversity and Inclusion Officer
  • Mr. Pete Ricketts, U.S. Senator (R-NE)
  • Ms. Robie Kakonge, Ambassador of Uganda to the United States
  • Ms. Tracy Pakulniewicz, Chief of Staff to DHS Under Secretary for Strategy, Policy, and Plans

Want more scoops on personnel moves? Find the most recent Who’s Who here.

UPCOMING EVENTS

Looking farther ahead? Find the most recent full international events calendar here.

Patrick Sheehy
In

International Issues Update

ON OUR DESKS

  • Conducting Congressional outreach regarding China Section 301 tariff review
  • Assessing business travel and visa backlogs impacting client conference
  • Developing strategies to address service trade barriers

These are just examples of client service. How can we help you? Email any IBC counsellor for assistance or consult our issues list to find the expert you’re looking for.

WIBC DISCUSSIONS

January 2023 schedule of events:

  • January 10: Treasury Deputy Assistant Secretary for International Development Finance and Policy Mathew Haarsager, Priorities for multilateral development bank reform and its effects on international business
  • January 12: State Principal Deputy Assistant Secretary for European and Eurasian Affairs Dereck Hogan, U.S.-European political and economic relations
  • January 19: House Ways and Means Committee Republican Chief Trade Counsel Joshua Snead, Trade agenda for the 118th Congress
  • January 24: EU Delegation Head of Trade Michael Margherita, U.S.-EU trade opportunities and challenges, including priorities for the Trade and Technology Council

WIBC discussions are open to WIBC members only. Not a member? Contact Ethan for membership inquiries.

YOU NEED TO KNOW

China

Chinese Ambassador to the United States Qin Gang has been named as China’s next foreign minister, leaving Xu Xueyuan now the Chargé d’Affaires. Foreign minister is a relatively weak role in the Chinese government, but some worry that Ambassador Qin’s time in Washington during a period of bilateral tension could influence him negatively going forward. Qin has indicated perhaps a more positive tone than expected, including by calling Secretary of State Anthony Blinken very shortly after his appointment and authoring a positive op-ed published in the Washington Post this week, lauding the global importance of a stable U.S.-China relationship.

In a New Year’s Eve address, President Xi Jinping emphasized economic growth as a foremost priority, continuing China’s rapid pivot away from COVID-19. Xi’s remarks echoed messaging from the December 2022 Central Economic Work Conference, where leaders noted that the country will pursue a proactive fiscal policy and “prudent” monetary policy in 2023, including by attempting to “attract and utilize foreign capital, widen market access, promote the opening-up of modern service industries, and grant foreign-funded enterprises national treatment.”

Contact: Pat Sheehy, Ethan Knecht

Trade

As the Biden administration enters its final two years and a new Congress is (partially) seated, departing Congressmen Representative Ron Kind (D-WI) and Senator Pat Toomey (R-PA) issued five recommendations to “save trade.” The pair call for a return to negotiating comprehensive free trade agreements (including market access) under strengthened Trade Promotion Authority, as well as “reining in” executive “abuse” of tariff authorities, clarifying the legal process for the United States to withdraw from free trade agreements, and reaffirming the United States’ commitment to the World Trade Organization.

The Asia Society Policy Institute released a report co-authored by former Acting Deputy USTR Wendy Cutler and former Trump White House trade advisor Clete Willems laying out revisions they believe could allow the United States to enter the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Contact: Steve Ziehm, Chris Benscher

Inflation Reduction Act (IRA)

The Treasury Department outlined on December 29 its anticipated direction and upcoming IRS guidance on the process for determining whether vehicles qualify for IRA critical mineral and battery component tax credits. Treasury’s broad definition of free trade agreements in this context has come under fire from Senator Joe Manchin (D-WV) who plans to introduce legislation blocking such an interpretation. These types of Treasury rules would not go into effect until after the IRS issues a Notice of Proposed Rulemaking in March and conducts a comprehensive public comment review period.

Contact: Steve Ziehm, Chris Benscher

ESG disclosures

Climate-related financial disclosures will continue to draw attention in 2023, as the U.S. Securities and Exchange Commission’s (SEC) preparing to finalize its proposed climate disclosure rules and the European Union implements its approved Corporate Sustainability Reporting Directive (CSRD). Congressional Republicans are expected to ramp up challenges about ESG materiality.

In its December 2022 meeting, the International Sustainability Standards Board (ISSB) updated plans to complete two proposals in 2023 that would cover companies’ disclosures of climate-related risks to their business and broaden ISSB’s focus to include corporate reporting on biodiversity and other topics. The ISSB’s two proposed rules (General sustainability-related disclosures and Climate related disclosures) drew more than 1,300 comments in 2022, with many commenters expressing concern about coherence between various standards schemes.

Contact: Chris Benscher

Quick takes

  • The United States will continue to recognize the National Assembly elected in 2015 as the last remaining democratic institution in Venezuela, despite the Venezuelan opposition’s vote to dissolve Juan Guaido’s interim government and remove Guaido as interim president.
  • The State Department established on January 3 a new Office of the Special Envoy for Critical and Emerging Technology, led by former Obama administration National Security Council Director for Strategy and History Dr. Seth Center.
  • The United States’ first interagency Strategy on Global Women’s Economic Security highlights private sector partnerships and consultations as a key tool for implementing programs that foster equal access to education, innovation, quality jobs, and decent work.
  • Sweden assumed on January 1 the rotating Presidency of the EU Council and is expected to focus heavily on the war in Ukraine during its term.
  • Taiwan sought to join WTO consultations initiated by China challenging U.S. semiconductor export controls. 

NOTICES, BILLS & HEARINGS

Federal Register Notices

WHO’S WHO

Arrivals

  • Alex Jacquez, Special Assistant to the President for Economic Development and Industrial Strategy
  • Andrew Miller, Deputy Assistant Secretary of State for Israeli-Palestinian Affairs
  • Seth Center, State Department Deputy Special Envoy for Critical and Emerging Tech

Departures

  • Brian McKeon, Deputy Secretary of State for Management and Resources
  • Dan Berkovitz, SEC General Counsel
  • Jarrett Blanc, State Department Deputy Special Envoy for Iran
  • Tim Wu, Special Assistant to the President for Competition and Tech Policy

Want more scoops on personnel moves? Find the most recent Who’s Who here.

UPCOMING EVENTS

  • Under Secretary of State for Economic Growth, Energy, and the Environment Jose W. Fernandez travels to Seoul and Tokyo, January 9-11
  • North American Leaders summit (Mexico City), January 11
  • Prime Minister Kishida Fumio of Japan will visit Washington, January 13th
  • U.S.-Taiwan Initiative on 21st-Century Trade negotiations (Taipei), January 14-17

Looking farther ahead? Find the most recent full international events calendar here.

Patrick Sheehy
In

International Issues Update

The International Issues Update is on hiatus for the holidays. We will resume publication in the first week of the new year. Please note the January 2023 WIBC schedule and a few other quick updates below.

We look forward to serving you in the New Year and wish you a relaxing break!

WIBC DISCUSSIONS

January 2023 schedule of events:

  • January 4: Treasury Deputy Assistant Secretary for International Development Finance and Policy Mathew Haarsager, Priorities for multilateral development bank reform and its effects on international business
  • January 12: State Principal Deputy Assistant Secretary for European and Eurasian Affairs Dereck Hogan, U.S.-European political and economic relations
  • January 19: House Ways and Means Committee Republican Chief Trade Counsel Joshua Snead, Trade agenda for the 118th Congress
  • January 24: EU Delegation Head of Trade Michael Margherita, U.S.-EU trade opportunities and challenges, including priorities for the Trade and Technology Council

WIBC discussions are open to WIBC members only. Not a member? Contact Ethan for membership inquiries.

Stocking stuffers

  • In a surprise visit to Washington (his first foreign travel since Russia launched its February 2022 assault), Ukrainian President Zelenskyy met President Biden Wednesday and is scheduled to address a joint session of Congress at 7:30 p.m. President Biden is expected to announce a nearly $2 billion dollar defense aid package for Ukraine, including provision of a Patriot surface-to-air missile system.
  • Treasury will issue Inflation Reduction Act (IRA) guidance before the end of 2022, providing information on clean energy tax credits and the “anticipated direction” of critical mineral and battery component requirements, among other topics. Treasury will issue a notice of proposed rulemaking on critical minerals and battery component requirements in March 2023.
  • Congress is racing to pass this week a $1.65 trillion omnibus appropriations bill funding the government for fiscal year 2023. Trade priorities did not make the final bill, leaving the Generalized System of Preferences and the Miscellaneous Tariff Bill still lapsed.
  • USTR extended for an additional 9 months more than 350 Section 301 tariff exclusions, aligning their expiration with a broader review underway.
Patrick Sheehy
In

International Issues Update

ON OUR DESKS

  • Forecasting outlook for U.S. sanctions on China
  • Mapping key embassy contacts for client outreach
  • Developing engagement strategies for new Congress
  • Preparing client submissions for USTR Special 301 review (Note: USTR today extended certain tariff exclusions to align with the ongoing review)

These are just examples of client service. How can we help you? Email any IBC counsellor for assistance or consult our issues list to find the expert you’re looking for.

WIBC DISCUSSIONS

WIBC discussions are on hiatus for the remainder of 2022.

January 2023 schedule of events:

  • January 4: Treasury Deputy Assistant Secretary for International Development Finance and Policy Mathew Haarsager, Priorities for multilateral development bank reform and its effects on international business
  • January 12: State Principal Deputy Assistant Secretary for European and Eurasian Affairs Dereck Hogan, U.S.-European political and economic relations
  • January 19: House Ways and Means Committee Republican Chief Trade Counsel Joshua Snead, Trade agenda for the 118th Congress
  • January 24: EU Delegation Head of Trade Michael Margherita, U.S.-EU trade opportunities and challenges, including priorities for the Trade and Technology Council

WIBC discussions are open to WIBC members only. Not a member? Contact Ethan for membership inquiries.

YOU NEED TO KNOW

China

Commerce on December 15 added China’s top computer memory company Yangtze Memory Technologies Corp (YMTC) and 35 smaller technology firms to its “entity list,” barring the firms from receiving any U.S. items and building on Commerce’s October action prohibiting U.S. exports to and support for Chinese manufacturing of advanced semiconductors.

Media reports indicate that Japan and the Netherlands will join U.S. controls, cutting China off from most advanced semiconductor manufacturing equipment. China has filed a case with the World Trade Organization opposing the semiconductor controls, but this is expected to have little to no impact. As China’s ability to directly retaliate for these controls with similar measures is limited, retaliation may come in other areas.

As part of the United States’ ongoing efforts to counter China, the State Department launched on Friday its new Office of China Coordination, also known as “China House.” The office, led by Deputy Assistant Secretary Rick Waters and replacing the China Desk in State’s Bureau of East Asian and Pacific Affairs, will  have three sections: traditional bilateral affairs, strategic communications; and a “global” team, focusing on Chinese activity beyond China.

Contact: Pat Sheehy, Ethan Knecht

Congress

With time ticking in its lame duck session, Congress passed the National Defense Authorization Act (NDAA), as well as a week-long extension of current appropriations – funding the government through December 23. House Appropriations Chair Rosa DeLauro (D-CT) plans to introduce the negotiated omnibus spending package on December 19.

Key trade programs including the Generalized System of Preferences (GSP) and Miscellaneous Tariff Bill (MTB) remain tied up as the House and Senate focus on priorities with little time remaining in the legislative calendar. House Ways and Means leaders from both parties have said GSP and MTB are bipartisan priorities that have some hope of passing, though opinions vary as to whether chances are better with GSP and MTB alone or wrapped into a larger vehicle. Senators Portman (R-OH) and Coons (D-CT) earlier in December outlined a potential “grand bargain” on trade, but the likelihood of passage appears slim.

Contact: Chris Benscher

U.S.-Africa Leaders Summit

President Biden hosted December 13-15 in Washington counterparts from forty-nine African nations and the African Union, with the Summit program addressing a wide range of issues from trade and investment to food security, civil society and governance.

U.S. announcements for the Summit included $2.5 billion in emergency aid and food security assistance, more than $15 billion in trade and business initiatives, a partnership to support African trade institutions, more than $1 billion in Export-Import Bank financing, and close to $1 billion in Trade and Development Agency initiatives. The United States also committed to support the African Union’s inclusion in the G20 group of nations. Biden also announced that he would travel to sub-Saharan Africa next year.

Contact: Pat Sheehy

Quick takes

  • Current Global AIDS Coordinator Ambassador John Nkengasong is expected to lead the State Department’s newly announced Bureau of Global Health Security and Diplomacy, which will comprise the existing Office of International Health and Biodefense, the Coordinator for Global COVID-19 Response and Health Security, and the Office of the U.S. Global AIDS Coordinator.
  • COVID continued to surge in China as the government loosened control measures amid slowed consumer spending and investment, rising inflation, and stagnating industrial production. China delayed its annual Central Economic Work Conference where it had been expected to announce stimulus measures.
  • After Poland dropped objections, the EU Council Summit approved a global minimum corporate tax plan, 18 billion euros in financing for Ukraine, and a ninth sanctions package on Russia. Despite the EU’s approval, Congressional Republicans warned Treasury Secretary Yellen that the administration does not have the authority to agree to the global plan without Congressional approval.
  • Seventeen stalled U.S. ambassadorial nominations (including to key countries like Brazil, Georgia, and the Czech Republic) were confirmed by the Senate, along with Treasury Under Secretary for International Affairs Jay Curtis Shambaugh.

NOTICES, BILLS & HEARINGS

Federal Register Notices

Newly-introduced legislation

House

  • H.R.9606 (Wilson, R-SC) Requires the Secretary of State to review the eligibility of certain Iranian officials to enter the United States
  • H.R.9598 (Smith, R-NJ) Requires a whole-of-government strategy to counter China
  • H.R.9596 (Pfluger, R-TX) Would require the Treasury Department to apply sanction determinations for additional technology companies who help the CCP undermine human rights (specifically Hikvision, Dahua, Tiandy, and BGI)
  • H.Res.1520 (Brady, R-TX) Would urge USTR negotiators to begin talks on a “new environmental goods agreement with updated product coverage
  • H.R.9561 (Smith, R-NJ) Requires the President to remove the privileged status from the Hong Kong Economic and Trade Office if Hong Kong loses autonomy from China
  • H.R.9560 (Sherman, D-CA) Would require the President to prohibit the export of petroleum products during periods of high oil prices
  • H.R.9555 (Levin, D-CA) Would create a national zero-emission vehicle standard
  • H.R.9554 (LaMalfa, R-CA) Would prevent the use of federal funds to negotiate or contribute to international agreements that provide for “loss and damage” climate funds
  • H.R.9545 (Espaillat, D-NY) Would reinstate the ban on the exports of oil and gas produced in the United States
  • H.R.9500 (Castro, D-TX) Would redirect USAID towards evidence-driven foreign aid models that leverage the power of the private sector
  • H.R.9490 (Gallagher, R-WI) Would impose sanctions against foreign telecommunications companies engaged in economic/industrial espionage against U.S. persons

​​Senate

  • S.5265 (Rubio, R-FL) Would require the Treasury Department to apply sanction determinations for additional technology companies who help the CCP undermine human rights (specifically Hikvision, Dahua, Tiandy, and BGI)
  • S.5269 (Hoeven, R-ND) Would prohibit the Department of Defense from requiring contractors to provide greenhouse gas emission disclosures
  • S.5273 (Rubio, R-FL) Would expand sanctions against Chinese entities for human rights violations
  • S.5263 (Merkley, D-OR) Would create a national zero-emission vehicle standard
  • S.5253 (Rubio, R-FL) Requires the President to remove the privileged status from the Hong Kong Economic and Trade Office if Hong Kong loses autonomy from China
  • S.5239 (Cotton, R-AR) Would impose sanctions against foreign telecommunications companies engaged in economic/industrial espionage against U.S. persons
  • S.5232 (Cornyn, R-TX) Would impose sanctions against those who trade with Russia in gold

WHO’S WHO

Arrivals

  • Devin Lynch, Director for Supply Chain and Technology Security
  • Giannangeli Leganski, Energy & Commerce Professional Staff Member
  • Laurel Blatchford, Treasury Department Director of IRA Implementation
  • Randall Oliver, USTR Director for Canada
  • Steffanie Bezruki, Secretary of Agriculture Chief of Staff

Want more scoops on personnel moves? Find the most recent Who’s Who here.

UPCOMING EVENTS

  • Tunisian Legislative Elections, December 17
  • EU Transport, Telecom, and Energy Council (Brussels), Brussels
  • EU Committee of Permanent Representatives (Brussels), December 20

Looking farther ahead? Find the most recent full international events calendar here.

Patrick Sheehy
In

International Issues Update

ON OUR DESKS

  • Analyzing final National Defense Authorization Act (NDAA)
  • Preparing submissions for USTR’s Section 301 tariff review
  • Assisting with due diligence reviews for client meetings
  • Mapping new Congress members’ ideological alignments
  • Investigating Ukraine reconstruction financing

These are just examples of client service. How can we help you? Email any IBC counsellor for assistance or consult our issues list to find the expert you’re looking for.

WIBC DISCUSSIONS

Up next:

  • December 15: Ambassador of Australia Arthur Sinodinos, U.S.-Australia cooperation on political and economic issues (please note this will be the last WIBC discussion of 2022)

January 2023 schedule will be published next week.

WIBC discussions are open to WIBC members only. Not a member? Contact Ethan for membership inquiries.

YOU NEED TO KNOW

China

China announced significant changes its “Zero COVID” policies this week, allowing those with mild symptoms to quarantine at home, relaxing testing and traveling restrictions, and prohibiting cities from locking down entire neighborhoods and districts. Other restrictions like mandatory masking remain in place, but China’s low vaccination rate could see the changes lead to a new COVID surge. The changes follow widespread public protests, but media reports indicate the government was motivated by economic concerns including lobbying by a major technology supplier.

While Chinese President Xi visited Saudi Arabia this week to deepen bilateral and regional ties on technology, infrastructure, and energy, U.S. action against China continued apace. Representative Kevin McCarthy (R-CA), presumptive incoming Speaker of the House, announced a new Select Committee on China to be chaired by Wisconsin Republican Mike Gallagher.

The  Federal Communications Commission (FCC) prohibited or severely limited use of products from several Chinese national technology champions, including Huawei and ZTE.

Contact: Pat Sheehy, Ethan Knecht

NDAA

House and Senate negotiators agreed on the final text of the FY2023 NDAA, which passed the House (350-80) and will progress to a Senate vote next week. The NDAA authorizes a record $858 billion in military spending ($45 billion more than the administration requested) and includes increased funding for Taiwan and Ukraine. Congress has yet to pass the federal appropriations bill necessary to fund the NDAA’s authorizations.

Highlights of NDAA provisions include: sanctions on trading with Russia in gold; increased funds for the Pacific Deterrence Initiative (PDI), including up to $2 billion a year through 2027 in military aid to Taiwan; a 2028 ban on federal contractors using Chinese-made semiconductor chips; and large increases in purchases of defense equipment and weapons not requested by the administration.

The agreement continues a prohibition on certain procurement from the Xinjiang Uyghur Autonomous Region of China and prohibits the sale of goods produced by forced labor in U.S. military commissaries and exchanges.

Contact: Chris Benscher

Latin America

In a week of political turmoil for Latin America this week, Peruvian President Pedro Castillo (the fourth Peruvian president in two years) was impeached and arrested. Peru’s ambassadot to Washington resigned, and the members of the Pacific Alliance postponed for the second time a planned summit in Lima.

Meanwhile in Argentina, former president and current vice president Cristina Fernández de Kirchner was sentenced to six years in prison for corruption and banned from holding public office. Kirchner announced she does not intend to run for office in 2024, but she holds immunity due to her current position and during appeals to the Supreme Court.

U.S. National Security Advisor Jake Sullivan visited Brasilia, and the two countries announced that incoming President Lula da Silva will conduct a state visit to Washington likely after his inauguration (contrary to earlier signals that Lula might attempt to visit Washington before taking office). Lula is expected to announce his cabinet soon, with leftist former presidential candidate Fernando Haddad likely to take the key finance minister role, probably indicating a looser fiscal policy for the new administration.

Contact: Ethan Knecht

Europe 

The United States hosted on December 5 the third ministerial meeting of the U.S.-EU Trade and Technology Council (TTC) in College Park, following which the parties announced outcomes  in the areas of technology cooperation, including a joint roadmap on artificial intelligence and an early warning mechanism to address and mitigate semiconductor supply chain disruptions.  In relation to the EU’s concerns over U.S. electric vehicle tax credits included in the Inflation Reduction Act (IRA), European Trade Commission Dombrovskis reported to the EU Parliament that he expects a bilateral task force on the issue will produce “output” by the end of 2022.

Contact: Steve Ziehm

Steel and Aluminum

A dispute settlement panel ruled on December 9 that U.S. Section 232 tariffs on steel and aluminum violate WTO rules. In a December 9 statement, the United States said it “ strongly rejects the flawed interpretation and conclusions in the World Trade Organization (WTO) Panel reports,” which “only reinforce the need to fundamentally reform the WTO dispute settlement system.” The decision could be moot since the United States can appeal the ruling to the currently defunct WTO Appellate Body, leaving any final resolution in limbo.

Separately, the United States has reportedly shared a proposal with the European Union on a Global Arrangement on Sustainable Steel and Aluminum, which would include a tiered system of higher tariffs on higher carbon-emitting steel and aluminum goods.

Contact: Steve Ziehm

Quick takes

  • The European Union and Chile concluded negotiations on an Advanced Framework Agreement to modernize their bilateral trade agreement. Impacts will include increased EU access to critical minerals for green technologies.
  • The EU Commission proposed on December 7 a ninth sanctions package against Russia, including additional designations of individuals and entities, new bank restrictions, export controls, and an investment prohibition targeting the mining sector in Russia.
  • Mexican Economy Minister Raquel Buenrostro said Mexico is considering delaying until 2025 a controversial ban on genetically modified corn, which U.S. agricultural stakeholders have protested vociferously.
  • The World Bank launched a new Sovereign Environmental, Social, and Governance (ESG) Data Portal, which includes data on 71 ESG indicators spanning 60 years and 217 economies.
  • The United States announced it will support the African Union’s inclusion in the G20 as part of next week’s African Leaders’ Summit in Washington.
  • Senate Democrats voted to reinstate Senator Schumer and the rest of his leadership team for the 118th Congress.

NOTICES, BILLS & HEARINGS

Federal Register Notices

Newly-introduced legislation

House

  • H.R.9483 (Stefanik, R-NY) Would require the disclosure of foreign purchase U.S. agricultural land
  • H.R.9460 (Schiff, D-CA) Would criminalize transnational repression
  • H.R.9438 (Jacobs, R-NY) Would impose a tax on foreign-owned under-utilized residential real property
  • H.R.9464 (Pallone, D-NJ) Would prohibit the Federal Communications Commission from granting certain licenses to non-geostationary orbit satellite systems
  • H.R.9461 (Wenstrup, R-OH) Would extend duty-free treatment to imports from Haiti

​​Senate

  • S.5195/S.5190 (Romney, R-UT) Would develop a strategy to expedite critical mineral mining and processing in the U.S./ Would end China’s developing nation status
  • S.5182 (Kaine, D-VA) Would extend the Independent International Fact-Finding Mission on Venezuela

Upcoming Congressional hearings 

House

Senate

WHO’S WHO

Arrivals

  • Caitlin Kovalkoski, ITA Director for Legislative and Intergovernmental Affairs
  • Dan Burgess, Legislative Director for Senator John Boozman (R-AR)
  • Emily Fischer, USTR Director for Southeast Asia
  • Kelly Fay Rodríguez, State Department Special Representative For International Labor Affairs
  • Neil Kornze, Chief of Staff for Senator Michael Bennett (D-CO)

Departures

  • Leila Elmergawi, NSC Director for International Economic Affairs (Digital Economy)
  • Brian P. McKeon, Deputy Secretary of State for Management and Resources

Want more scoops on personnel moves? Find the most recent Who’s Who here.

UPCOMING EVENTS

Looking farther ahead? Find the most recent full international events calendar here.

Patrick Sheehy
In

International Issues Update

The International Issues Update is on hiatus for the Thanksgiving holiday. We will resume publication next week. Please note our upcoming meetings and a few quick updates below.

You have our thanks for allowing us to serve you. We wish you all a relaxing holiday.

WIBC DISCUSSIONS

In case you missed it:

  • November 22: Deputy Assistant Secretary of State for India Nancy Izzo Jackson, the Administration’s economic and political priorities in India

Up next: Register for upcoming WIBC discussions here

  • November 28: Deputy Assistant Secretary of Commerce for Export Administration Matthew Borman, export controls – priorities and the road ahead
  • December 15: Ambassador of Australia Arthur Sinodinos, U.S.-Australia cooperation on political and economic issues

WIBC discussions are open to WIBC members only. Not a member? Contact Christina for membership inquiries.

Turkey takes

  • The UN Climate Change Conference (COP27) finished with an agreement to provide “loss and damage” funding for vulnerable countries hit hard by climate disasters. The final COP27 report of outcomes, known as the Sharm el-Sheikh Implementation Plan, also estimates that a global transformation to a low-carbon economy is expected to require investments of at least USD 4-6 trillion a year.
  • USTR has extended Section 301 tariff exclusions pertaining to COVID-19 related products for three months, until the end of February 2023.  A press release and federal register notice are available.
  • The Treasury Department’s Office of Foreign Assets Control (OFAC) has published a determination implementing a price cap on Russian origin oil. OFAC has published guidance on the implementation and issued general licenses 55, 56, and 57. The licenses authorize services related to certain oil shipments to Japan, specific European states, and when necessary to preserve life or safety.
  • The 2023 State Department authorization bill, which would place restrictions on senior State Department officials working for certain foriegn governments, may pass into law after being attached to the Senate National Defense Authorization Act.

 

Patrick Sheehy
In

International Issues Update

ON OUR DESKS

  • Analyzed prospects for tax legislation during the lame duck and 118th Congress
  • Assisted with export compliance
  • Preparation of comments for 4-year review of Section 301 China tariffs

How can we help you? Email any IBC counsellor for assistance or consult our issues list to find the expert you’re looking for.

WIBC DISCUSSIONS

In case you missed it:

  • November 9: Deputy Assistant Secretary of State for Trade Policy and Negotiations Tony Fernandes, Global trade policy and negotiations affecting international business

Up next: Register for upcoming WIBC discussions here

  • November 16: Assistant Secretary of State for Energy Resources and former U.S. Ambassador to Ukraine Geoffrey Pyatt, International energy policy
  • November 22: Deputy Assistant Secretary of State for India Nancy Izzo Jackson, the Administration’s economic and political priorities in India

WIBC discussions are open to WIBC members only. Not a member? Contact Christina for membership inquiries.

YOU NEED TO KNOW

Midterm Elections

Democrats succeeded in minimizing typical anti-incumbent losses in the midterm elections on November 8, although the final results deciding partisan control of the House and Senate are still to be determined as of this writing.  Congress will return for the lame duck session starting November 14.  Given the likelihood of Republican control of the House in the 118th Congress, this session may provide Democrats with a final chance to address tax (child tax credit) and trade (TAA) priorities prior to the 2024 election.

President Biden in a post election press conference said he anticipated working with Republican colleagues on a number of issues, including confronting Russia’s aggression in Ukraine.  However, he said he would not compromise with Republicans to reverse climate commitments or taxes on corporations.  He also said that he intends to run for the 2024 presidential election and will make a final decision early in 2023.

Contact: Chris Benscher

COP27

The 2022 United Nations Climate Change Conference, or COP27, opened November 6 in Sharm El-Sheikh, Egypt.  The first day of COP27’s 11 thematic days, known as finance day, focused on adjusting finance mechanisms to give poorer countries greater access to green loans. Egypt’s finance ministry released three initiatives, based on the Bridgetown Initiative, which, if implemented, would lead global finance institutions, including the World Bank and IMF, to increase loans available to poorer countries to adapt to climate disasters.

In a side event, U.S. climate envoy John Kerry announced on November 9 a major expansion of the First Movers Coalition, the public-private partnership to commercialize clean technologies through advance purchase commitments.  Kerry also launched a process to design an Energy Transition Accelerator (ETA) to catalyze private capital for the clean energy transition in emerging and developing economies.  The sale of the credits would raise money for renewable energy projects or climate adaptation efforts in low-income nations. 13 countries in Africa also launched their own carbon market called the Africa Carbon Markets Initiative (ACMI).  In other developments, the United States and China reportedly resumed informal talks on bilateral climate policy that had been suspended since the summer. President Biden is set to leave on November 10 to attend COP27.

Contact: Chris Benscher

Inflation Reduction Act

Several U.S. trading partners filed comments with the Treasury Department this week as part of the Biden administration’s rulemaking on the electric vehicle tax credits included in the Inflation Reduction Act (IRA).   The European Union, South Korea, and Japan, among others, raised concerns about the discriminatory nature of the tax credits and called for changes prior to the issuance of regulations.  The EU, in particular, noted that if implemented in its current form, the IRA risks creating tensions that could lead to reciprocal or retaliatory measures.  The EU called for joint engagement in the EU-US Task Force on the Inflation Reduction Act to set out “concrete, amicable solutions” to the EU’s concerns.

Contact: Steve Ziehm

Quick takes

  • Chinese President Xi Jinping has begun in-person re-engagement with his counterparts following the COVID-19 pandemic, with a meeting scheduled with President Biden at the sidelines of the G20 in Indonesia next week. German Chancellor Olaf Scholtz and Vietnamese Communist Party leader Nguyen Phu Trong both visited Beijing in the past two weeks, while Xi is reportedly considering travel to Saudi Arabia by the end of the year.
  • The U.S. Treasury delivered a semi-annual report on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States on November 10, noting continued enhanced analysis of Switzerland. The report highlights China, Japan, Korea, Germany, Malaysia, Singapore, and Taiwan as needing special scrutiny and reiterated previous calls for transparency from China.
  • The Commerce Department revoked Russia’s market economy status for antidumping proceedings.  Going forward, Commerce will apply an alternative methodology to calculate the antidumping duties on imports from Russia, likely resulting in higher tariffs.
  • Colombia’s legislature passed a major $4 billion reform to its tax code that would increase duties on oil and coal, single-use plastics, and processed foods and beverages to fund an expanded social welfare state. The law will also impose a wealth tax and raise income tax rates on high earners.

NOTICES, BILLS & HEARINGS

Federal Register Notices

Newly-introduced legislation

House

  • H.R.9277 (Khanna, D-CA) Would ban U.S. gasoline exports when prices remain $3.12 or higher across a previous 7 day period continuing until prices drop below $3.12 for 7 days.

Upcoming Congressional hearings 

House

Senate

WHO’S WHO

Arrivals

  • Anjana Rajan, Assistant National Cyber Director for Technology Security
  • Caitlin Klevorick, DFC Vice President for External Affairs
  • Dimitri Kusnezov, DHS Under Secretary for Science and Technology
  • Justin McFarlin, Deputy Assistant Secretary of Defense for Industrial Base Development
  • Raquel Silva, USTR Director for Colombia and Chile

Want more scoops on personnel moves? Find the most recent Who’s Who here.

UPCOMING EVENTS

  • ASEAN Leaders’ summit (Phnom Penh), November 10-13
  • B20 &L20 summits (Bali), November 13-14
  • Congress is in session, November 14-18
  • Codex Executive Commission (Rome), November 14-18
  • World Food Programme Executive Board (Rome), November 14-18
  • APEC Leaders’ Week (Bangkok), November 14-20
  • G20 Summit (Bali), November 15-16
  • EU Foreign Affairs Council (Brussels), November 17
  • IAEA Board of Governors (Vienna), November 17-18
  • OECD Ministerial (Luxembourg), November 17-18
  • Kazakh elections, November 20
  • Nepali elections, November 20
  • AU Summit on Industrialization and Economic Diversification (Niamey, Niger), November 20-25
  • Soccer World Cup, November 20-December 18

Looking farther ahead? Find the most recent full international events calendar here.

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